Organizational changes and layoffs at Reykjavík City Hall
Today, the City Executive Council approved a major reorganization of the Office of the Mayor and Chief Executive Officer. These proposals align with the majority coalition's steering group goals to streamline operations and reform the governance structure of Reykjavík City. The restructuring aims to simplify administration, shorten communication lines, cut overhead, and optimize the City's financial resources. Meanwhile, the City will protect frontline services.
These changes impact the Office of the Mayor and Chief Executive Officer, which also oversees the communications and events office and the Human Rights Office. The restructuring affects 27 of the 42 positions across these offices. Other departments or offices within the City will absorb nine of these positions. The City will eliminate 18 positions, though it expects to fill several new roles during implementation and outsource certain functions. Once the changes are fully in place, the City will have reduced office staff by at least 40%. This constitutes a mass layoff, and the City has notified the Directorate of Labor.
Once fully implemented, these organizational changes are projected to save the City 280 to 330 million króna annually.
Mayor Hildur Björnsdóttir:
"I promised to deliver changes and critically examine how the City operates. It is only fitting to begin with the areas closest to me — here at the Office of the Mayor and Chief Executive Officer. These are difficult decisions, and we did not make them lightly. Without change, however, the City cannot sustain statutory services, necessary investments, or essential infrastructure maintenance. That is why we must take these steps. The new majority will continue to leave no stone unturned to achieve greater efficiency and provide better services for residents," Hildur said.
Alongside these changes, the City will tighten hiring restrictions and attendance requirements within central administration. The City will also reduce employee travel and introduce a new policy requiring the Office of the Mayor and Chief Executive Officer to approve all travel authorizations.
The reorganization is expected to take effect July 1st In the coming weeks and months, the mayor's ongoing efficiency task force will present additional proposals addressing other aspects of City operations.
Key organizational changes in detail
The City will dissolve the policy and development team within the Office of the Mayor and Chief Executive Officer, and discontinue key functions — including Research Services, public health affairs project management, and the Green Deal. Economic development will transfer to the Department of Environment & Planning, and external innovation will move to the Department of Service & Innovation. The office will retain functions such as policy coordination, data protection, and international affairs, but with a revised focus.
The City will close the communications and events office, and move the events team to the Department of Culture & Sports. A smaller, specialized communications team will focus on digital solutions, marketing, and information sharing.
The City will dissolve the Human Rights Office and Human Rights Council. Relevant departments will assume these statutory functions to bring them closer to service delivery. The City Executive Council will assume responsibility for the municipality's equality affairs. Responsibility for work related to immigrants, people of foreign origin, violence prevention, and Bjarkarhlíð will transfer to the Department of Welfare. The Department of Education & Youth will take over work related to LGBT+ education and support for LGBT+ children and young people. The City will also establish a new Reykjavík City Council for Older Adults and Accessibility to carry out the statutory consultative and advisory role on behalf of older adults and disabled people.
City Executive Council meeting minutes June 26, 2026